AN OVERLOOKED BASIS OF
JURISDICTION FOR NET
NEUTRALITY: THE WORLD TRADE
ORGANIZATION AGREEMENT ON
BASIC TELCOMMUNICATIONS
SERVICES
Jennifer A. Manner* with Alejandro Hernandez**
I.
INTRODUCTION
Net neutrality is the principle that Internet service providers (“ISPs”) or
broadband service providers (“BSPs”) must treat all data on the Internet equally.1 Under the principle of net neutrality, ISPs and BSPs are not permitted to
discriminate or charge differentially by user, content, site, platform, application, type of attached equipment, or modes of communication.2 However, there
has been a substantial amount of controversy over whether net neutrality
should be imposed as a regulatory requirement.3 This issue has been particular* Jennifer A. Manner is Vice President of Regulatory Affairs at EchoStar where she is
responsible for the company’s domestic and international regulatory and policy issues. Ms.
Manner currently serves as an adjunct professor at Georgetown University Law Center. Ms.
Manner has published several books on telecommunications issues and has written numerous law review articles. The views reflected in this article are those of the authors and do not
necessarily represent those of EchoStar or Georgetown University Law Center. The author
would also like to thank Jonathan Quigley for his help with this article.
** Alejandro Hernandez, 2013 L.L.M., Georgetown University Law Center.
1
See Dan Helling, Net Neutrality and Preserving Freedoms of the Internet, 6 LAW &
SOC’Y J. UCSB 51, 53–54 (2007).
2
See id. at 53–54, 58; see also Net Neutrality 101, SAVE THE INTERNET, FREE PRESS,
http://commcns.org/MQbKm1 (last visited Feb. 13, 2014).
3
Emily R. Roxberg, FCC Authority Post-Comcast: Finding a Happy Medium in the
Net Neutrality Debate, 37 J. CORP. L. 223, 233–34 (2011) (discussing Comcast Corp. v.
FCC, 600 F.3d 642 (D.C. Cir. 2010)). See generally THE PROGRESS & FREEDOM FOUND.,
NET NEUTRALITY OR NET NEUTERING: SHOULD BROADBAND INTERNET SERVICES BE REGULATED (Thomas M. Lenard & Randolph J. May eds., 2006); Davina Sashkin, Failure of
Imagination: Why Inaction on Net Neutrality Regulation Will Result in a De Facto Legal
57
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ly contentious in the United States where the Federal Communications Commission (“FCC” or “Commission”) has begun to impose net neutrality requirements that focus on whether the FCC has jurisdiction to regulate broadband services.4
Net neutrality continues to be a controversial issue with powerful advocates
both in favor and against the imposition of net neutrality requirements. The
FCC and net neutrality advocates have argued that the failure to impose net
neutrality requirements could limit the content to which subscribers and consumers wish to gain access.5 In a situation without net neutrality requirements,
some argue that the service provider may have an incentive to provide cheaper
and better access to its own content versus a third party’s content as it will
provide a competitive advantage.6 To remedy this issue, net neutrality advocates have argued for government intervention to prevent such discrimination.7
Additionally, implementation of the net neutrality principle has been very controversial8 because consumers are already protected by existing regulations.9
Furthermore, any requirements regarding the provision of specific content
could be viewed as a violation of the First Amendment.10 The controversy has
also been based on the fact that some opponents of net neutrality argue that the
FCC does not have the jurisdiction to regulate broadband.11
Regime Promoting Discrimination and Consumer Harm, 15 COMMLAW CONSPECTUS 261
(2006).
4
In re Preserving the Open Internet Broadband Industry Practices, Report and Order,
21 F.C.C.R. 17,905, 17,906 (Dec 21, 2010) (requiring telecommunications and informationtechnologies providers to operate with the goal of keeping the Internet open) [hereinafter
Open Internet Order]; see also Jennifer Wong, Net Neutrality: Preparing for the Future, 31
J. NAT’L ASS’N ADMIN. L. JUDICIARY 669, 680 (2011) (“In 2005 . . . the FCC pursued its
first enforcement of net neutrality principles.”).
5
Open Internet Order, supra note 4, at 17,908–09.
6
See Helling, supra note 1, at 55 (“For example, if an ISP strikes up a deal with
Google and not with smaller search engines, such as WebCrawler, Google’s searches could
be pre-set to open faster than the smaller search engines on your computer, ultimately limiting the individual’s choice and fair market competition.”).
7
Open Internet Order, supra note 4, at 17,909, 17,911.
8
See Christopher R. Steffe, Why We Need Net Neutrality Legislation Now Or: How I
Learned to Stop Worrying and Trust the FCC, 58 DRAKE L REV. 1149, 1159 (2010) (“The
current debate regarding network neutrality involves primarily two groups: (1) those who
believe the principle of network neutrality should be legislated; and (2) those who wish to
continue to allow the FCC, which has traditionally enforced the basic principles of the Internet, to enforce net neutrality.”).
9
See Wong, supra note 4, at 702-03 (“Many opponents of regulation also believe that
current laws and free market forces already amply protect consumers from the hypothetical
doomsday scenarios posed by net neutrality.”).
10 Christopher E. Roberts, Can I Still Google My Yahoo? Reframing the Net Neutrality
Debate—Why Legislation Actually Means Deregulation, 77 UMKC L. REV. 765, 779
(2009).
11 See Steffe, supra note 8, at 1164–65. But see Aaron K. Brauer-Rieke, The FCC Tackles Net Neutrality: Agency Jurisdiction and the Comcast Order, 24 BERKELEY TECH. L.J.
2014]
An Overlooked Basis of Jurisdiction for Net Neutrality
59
Despite FCC action in this area, early court cases have been unclear concerning the FCC’s jurisdiction to fully implement net neutrality typerestrictions.12 However, the United States Court of Appeals for the D.C. Circuit on January 14, 2014, determined that the FCC had not, in its recent net
neutrality rulings, cited to any statutory authority that would “justify its order
compelling a broadband provider to adhere to open network management practices.”13
Furthermore, Congress has not been single-minded about whether the FCC
should be afforded express jurisdiction to remedy net neutrality concerns. 14
Accordingly, Congress has considered a number of bills that would either provide the FCC with clear net neutrality authority or prohibit the FCC from acting in this area.15 With the recent D.C. Circuit ruling on net neutrality, it is
593, 607–08 (2009) (“The Commission cited six separate provisions to support its Title I
ancillary authority: section 1 of the Communications Act, section 201 of the Communications Act, section 706 of the Telecommunications Act of 1996, section 256 of the Telecommunications Act, section 257 of the Telecommunications Act, and section 601(4) of the
Telecommunications Act.”).
12 See Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967,
1002–03 (2005) (deferring to the FCC, because the questions resolved “in the order under
review involve[d] a ‘subject matter [that] is technical, complex, and dynamic’”); Comcast
Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010) (finding against the Commission, because the
“Commission has failed to tie its assertion of ancillary authority over Comcast’s Internet
service to any ‘statutorily mandated responsibility’”).
13 Verizon v. F.C.C., No. 11-1355, 2014 WL 113946, at *2 (D.C. Cir. Jan. 14, 2014)
[hereinafter Net Neutrality Decision].
14 Edward Wiet, A Ruling Could Support F.C.C.’s Net Neutrality Defense, N.Y. TIMES
BLOG (May 20, 2013, 5:53 PM), http://commcns.org/1kGeLUw (“Justice Antonin Scalia
wrote that in cases where Congress has left ambiguous the outlines of a regulatory agency’s,
‘the court must defer to the administering agency’s construction of the statute so long as it’s
permissible.’”).
15 See, e.g., Internet Freedom and Nondiscrimination Act of 2006, H.R. 5417, 109th
Cong. (2006) (attempting to amend the Clayton Act with respect to competitive and nondiscriminatory access to the Internet); Communications Opportunity, Promotion, and Enhancement Act of 2006, H.R. 5252, 109th Cong. (2006) (proposing to create a national
franchise for video providers, and additionally addresses net neutrality, e911, and municipal
broadband); Network Neutrality Act of 2006, H.R. 5273, 109th Cong. (2006) (proposing
that it is the policy of the United States to, among other things, maintain the freedom to use
broadband telecommunications networks, including the Internet, without interference from
network operators. Outlines specified duties of broadband network providers to ensure
broadband network neutrality, including the duty to: (1) enable users to utilize their broadband service to access all lawful content, applications, and services available over broadband networks, including the Internet; and (2) not block, impair, degrade, discriminate
against, or interfere with the ability of any person to utilize their broadband service for
lawful purposes. Provides exceptions for providers, including implementing reasonable
measures to manage its networks and protect network security. Provides for implementation
and enforcement of this Act through the Federal Communications Commission (FCC));
Communications, Consumer’s Choice, and Broadband Deployment Act of 2006, S. 2686,
109th Cong. (2006) (Introduces Title ix – Section 901 on Internet Neutrality:
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likely the FCC will soon consider next steps on net neutrality.
Both proponents and opponents of net neutrality have omitted from their debate an important and clear jurisdictional basis for the FCC to implement net
neutrality requirements: the Basic Agreement on Trade in Telecommunications
Services (“BATS”) of the World Trade Organization (“WTO”). 16 Under the
United States’ commitment to the BATS, the United States has the treaty obligation to implement many net neutrality principles for broadband services,
including transparency, and fair and non-discriminatory interconnection for
broadband services.17 While the BATS is not self-executing18 by the FCC,19 the
Sec. 901. Neutral networks for consumers.
(a) IN GENERAL- Beginning 1 year after the date of enactment of this
Act, the Federal Communications Commission shall report annually to
the Senate Committee on Commerce, Science, and Transportation and
the House of Representatives Committee on Energy and Commerce for
5 years regarding—
(1) the developments in Internet traffic processing, routing,
peering, transport, and interconnection;
(2) how such developments impact the free flow of information over the public Internet and the consumer experience using the
public Internet;
(3) business relationships between broadband service providers and applications and online user services; and
(4) the development of and services available over public and
private Internet offerings.
(b) DETERMINATIONS AND RECOMMENDATIONS- If the Commission determines that there are significant problems with any of the
matters described in subsection (a) the Commission shall make such
recommendations in its next annual report under subsection (a) as it
deems necessary and appropriate to ensure that consumers can access
lawful content and run Internet applications and services over the public
Internet subject to the bandwidth purchased and the needs of law enforcement agencies. The Commission shall include recommendations
for appropriate enforcement mechanisms but may not recommend additional rulemaking authority for the Commission.
Communications, Consumer’s Choice, and Broadband Deployment Act of 2006, S. 2686,
109th Cong. (2006).
16 WTO, Fourth Protocol to the General Agreement on Trade in Services, S/L/20 (Apr.
30, 1996), 36 I.L.M. 366 (1997) (granting the FCC the power to make “such rules and regulations . . . as may be necessary to carry out the provisions of . . . any international radio or
wire communications treaty or convention”).
17 Id.; see also WTO, Telecommunications Services: Reference Paper, Negotiating
Group
on
Basic
Telecommunications
(Apr.
24,
1996),
available
at
http://commcns.org/1eZhXqF.
18 See Self-Executing Treaty Definition, LEGAL INFO. INSTITUTE, CORNELL UNIV. LAW
SCHOOL, http://commcns.org/1dMWgVY (last visited Feb. 13, 2014) (A self-executing
treaty is defined as a treaty that becomes judicially enforceable upon ratification. As opposed to a non-self executing treaty, which becomes judicially enforceable through the
implementation of legislation. A treaty could be identified as either self executing or nonself executing by looking to various indicators, including statements that are made by Congress or the Executive regarding the treaty, indeterminate language of the treaty, or if the
2014]
An Overlooked Basis of Jurisdiction for Net Neutrality
61
FCC has the legal jurisdiction to implement the BATS under § 303(r) of the
United States Code.20 Accordingly, as discussed below, not only does the FCC
have the legal authority to implement net neutrality regulations under the
BATS,21 the United States has committed itself to its implementation, because
BATS is a treaty.22 As the FCC will likely take further action to justify its net
neutrality actions, BATS, coupled with § 303(r) of the Communications Act,
provides the FCC with a solid jurisdictional basis for such actions.23
II.
NET NEUTRALITY
Net Neutrality is best understood as an equal platform where Internet users
can choose the applications and services they wish to use, as well as the content they want to access, create, or share with others.24 Advocates have stated
that rules on net neutrality are necessary to protect innovations on the Internet
and to preserve the kind of openness that has allowed the Internet to flourish.25
treaty deals with a matter within the exclusive law-making power of Congress, indicating
that Congress must create implementing legislation.).
19 Charles M. Oliver, WTO Agreement on Basic Telecommunications Services and FCC
Implementation, 15 COMM. LAW. 13 (1998).
20 47 U.S.C. § 303(r) (2006).
21 Oliver, supra note 19, at 13.
22 ROBERT CARR ET AL., TELECOMMUNICATIONS EQUIPMENT: U.S. PERFORMANCE IN
SELECTED MAJOR MARKETS, at 1-2 (Office of Studies, U.S. Int’l Trade Comm’n, Pub. 3150,
1998).
23 Although we will explain further in the course of the article, Section 303(r) has been
utilized consistently by the FCC as a basis for implementing treaties that the United States is
a party to. For instance, in implementing the United States commitments made in treaties
negotiated and agreed to under the ITU, the FCC utilizes Section 303(r) of the Communications Act as the basis of jurisdiction. Similarly, the FCC has relied on Section 303(r) to
implement its WTO commitments in the past and continues to utilize the rules it adopted as
part of this implementation. To date, there have been no challenges to the FCC’s authority
to implement treaties in its discretion. In fact, many of its licensees, such as wireless service
providers, rely on and have commitments in their licenses or are required to comply with
international law requiring compliance with international treaties. Therefore, we believe that
the FCC has solid jurisdictional basis for such actions.
24 CONSUMER & GOVERNMENTAL AFFAIRS BUREAU, FED. COMMC’NS COMM’N, CONSUMER
GUIDE:
THE
OPEN
INTERNET
(2013),
available
at
http://transition.fcc.gov/cgb/consumerfacts/openinternet.pdf. For a fuller discussion about
net neutrality regulation in the United States, see Barbara Van Schewick’s report. BARBARA
VAN SCHEWICK, NETWORK NEUTRALITY & QUALITY OF SERVICE: WHAT A NONDISCRIMINATION RULE SHOULD LOOK LIKE 16, 18 (Stanford Law Sch. Ctr. for Internet &
Soc’y, unnumbered working paper, 2012). See also David W. Opderbeck, Does the Communications Act of 1934 Contain A Hidden Internet Kill Switch?, 65 FED. COMM. L.J. 1, 31–
32 (2013); Kevin Werbach, Off the Hook, 95 CORNELL L. REV. 535, 581 (2010) (“We can
now see that future telecommunications and broadcast networks will all be based on Internet-like data networking technologies.”); Susan P. Crawford, The Internet and the Project of
Communications Law, 55 UCLA L. REV. 359, 362–63 (2007).
25 VAN SCHEWICK, supra note 25, at 16 (“Network neutrality rules . . . impose some
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Likewise, net neutrality advocates believe that network neutrality restrictions
are critical to ensure that service providers are unable to block access to lawful
applications provided by ISPs and BSPs or to downgrade their data streams.26
These advocates also believe that net neutrality is necessary to preserve the
Open Internet and its resulting benefits.27
In order to accomplish these objectives, the FCC has focused on implementation requirements that would lead ISPs and BSPs to freely allow users to
send and receive all lawful content, use all lawful services and applications,
and also use all lawful devices that do not damage the network.28 Regarding
access, the FCC has encouraged ISPs to allow consumers to access all network, service, content, and application providers.29 In addition, the FCC has
announced Internet principles that declare that ISPs or BSPs “cannot prevent
users from accessing the lawful Internet content, applications, and services of
their choice, nor can they prohibit users from attaching non-harmful devices to
the network.”30
To advance these goals, the FCC has adopted three basic Open Internet
rules: transparency; no blocking; and no unreasonable discrimination.31 These
rules were recently struck down by the D.C. Circuit with respect to the treatment of common carriers.32 The purpose and intent of the FCC’s Open Internet
constraints on the evolution of the network in order to allow the Internet to continue to
foster application innovation, preserve user choice or foster democratic discourse.”).
26 Id. at 14.
27 Julius Genachowski, Chairman, Fed. Commc’ns Comm’n, Prepared Remarks at the
Brookings Institution: “Preserving a Free and Open Internet: A Platform for Innovation,
Opportunity, and Prosperity” 3 (Sept. 21, 2009), available at http://commcns.org/1g3kPkl.
28 David W. Opderbeck, Does the Communications Act of 1934 Contain A Hidden
Internet Kill Switch?, 65 FED. COMM. L.J. 1, 3–4 (2013).
29 Genachowski, supra note 28, at 4.
30 Id. at 4.
31 The three basic Open Internet rules are:
1. Transparency: Broadband providers must disclose information regarding their network management practices, performance,
and the commercial terms of their broadband services;
2. No Blocking: Fixed broadband providers (such as DSL, cable modem or fixed wireless providers) may not block lawful content,
applications, services or non-harmful devices. Mobile broadband providers may not block lawful websites, or applications that compete with
their voice or video telephony services;
3. No Unreasonable Discrimination: Fixed broadband providers may not unreasonably discriminate in transmitting lawful network
traffic over a consumer’s broadband Internet access service. The no
blocking and no unreasonable discrimination rules are subject to limited
exceptions for “reasonable network management.
Open Internet Order, supra note 4, at 17,906.
32 Net Neutrality Decision, supra note 13, at 4 (“Because the Commission has failed to
establish that the anti-discrimination and anti-blocking rules do not impose per se common
carrier obligations, we vacate those portions of the Open Internet Order.”).
2014]
An Overlooked Basis of Jurisdiction for Net Neutrality
63
rules are to guarantee that the Internet continues to be the stage for innovation
and job creation.33 The FCC’s rules empower consumers and entrepreneurs.34
The rules also protect free expression, promote competition, and increase certainty in the marketplace by providing greater predictability for all stakeholders regarding federal policy in this area.35 Finally, the FCC’s Internet rules spur
investment both at the “edge,” and at the core of broadband networks.36
In its adoption of these rules, the FCC has emphasized that at no point
would the adoption result in content regulation.37 The FCC recognized the First
Amendment issues that would arise if content regulation were addressed. 38
Instead, the FCC focused on ensuring that the purpose of the Open Internet
rules was to clarify high-level, flexible rules of the road for broadband to ensure that neither the government nor the companies that provide broadband
service could restrict innovation on the Internet.39
III.
THE IMPORTANCE OF NET NEUTRALITY
The wireless broadband market in the United States, like other countries, is
fairly limited in terms of competition. 40 Therefore, competition is a critical
Genachowski, supra note 28, at 4.
Open Internet Order, supra note 4, at 18,043.
35 Id. at 17,906.
36 Id.
37 Id. at 17,982, 17,985.
38 Id. at 17,981–85.
39 Id. at 17,906–07; see also Barbara S. Esbin, A Point of View: Net Neutrality Regulation in the United States, PROGRESS & FREEDOM FOUND.: PROGRESS SNAPSHOT (RELEASE
4.21), Oct. 2008, at 1, available at http://commcns.org/1mfc3qX (discussing the history of
net neutrality).
40 In re Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act
of 1993, Annual Report and Analysis of Competitive Market Conditions with Respect to
Commercial Mobile Services, Sixteenth Report, 28 F.C.C.R. 3700, 3728 (Mar. 21, 2013).
The United States telecommunications market for broadband services, especially on the
network side, is characterized by limited competition. See also Competition and Regulation
in a Converged Broadband World, Int’l Telecomm. Union (Feb. 2013), available at
http://commcns.org/1osM9yt (This report was prepared by Dr. Christian Koboldt of
DotEcon Limited, under the direction of the Telecommunication Development Bureau
(BDT) Regulatory and Market Environment Division (RME). This report is part of a new
series of ITU reports on broadband that are available online and free of charge at the ITU
Universe of Broadband portal. The FCC, in this Report provides a detailed assessment of
competitive market conditions across the entire mobile wireless sector, particularly broadband.). In re Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act
of 1993, Annual Report and Analysis of Competitive Market Conditions with Respect to
Commercial Mobile Services, Sixteenth Report, 28 F.C.C.R. 3700, 3728 (Mar. 21, 2013).
Currently, “the four nationwide service providers (AT&T, Sprint Nextel, T-Mobile and
Verizon Wireless), which, by the end of 2011, accounted for just over 90 percent of the
nation’s mobile wireless subscribers (including wholesale connections and machine-tomachine connections), with AT&T and Verizon Wireless together accounting for 64 per33
34
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concern to policy makers.41 Accordingly, consumers who must rely on obtaining broadband access through BSPs or ISPs have raised concerns about access
to these limited networks.42 Net neutrality proponents allege that telecommunications companies that supply broadband access may seek to impose a tiered
service model in order to control their network pipeline.43 This action may limit
competition for broadband services, create artificial scarcity, and force subscribers to buy uncompetitive services.44 Net neutrality proponents argue that
this limitation discriminates results in certain websites not being made available to consumers – a form of discrimination.45
Proponents of net neutrality include a broad range of interests.46 For example, Internet giants Google, Facebook, and Amazon, who depend on access to
the networks of competitors, are the biggest supporters of net neutrality.47 Today, net neutrality also finds powerful support in government, beginning with
President Obama himself, who has stated that the adoption of the FCC’s net
neutrality rules will preserve the free and open nature of the Internet, while
“encouraging innovation, protecting consumer choice, and defending free
speech.”48 President Obama reiterated his support for the Open Internet rules,
cent.” In re Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act
of 1993, Annual Report and Analysis of Competitive Market Conditions with Respect to
Commercial Mobile Services, Sixteenth Report, 28 F.C.C.R. 3700, 3732 (Mar. 21, 2013).
These service providers have increased their subscriber base and now “cover in excess of 91
percent of the U.S. population in large proportions of the western, mid-western, and eastern
United States.” In re Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and Analysis of Competitive Market Conditions with
Respect to Commercial Mobile Services, Sixteenth Report, 28 F.C.C.R. 3700, 3737 (Mar.
21, 2013).
41 ROBERT D. ATKINSON, THE INFO. TECH. & INNOVATION FOUND., THE ROLE OF COMPENATIONAL BROADBAND POLICY 1
(2007), available
at
TITION
IN
A
http://commcns.org/1jDAYT5.
42 Lawrence Lessig & Robert W. McChesney, No Tolls on The Internet, WASH. POST,
June 8, 2006, at A23.
43 Id.
44 Id. (“[Network owners] would be able to sell access to the express lane to deeppocket corporations and relegate everyone else to the digital equivalent of a winding dirt
road.”).
45 Brendan Sasso, Google, Facebook, Netflix Defend Net Neutrality Rules in Court,
HILL (Nov. 16, 2012), http://commcns.org/LYYVFl (“The supporters of the [Open Internet]
rules say [that] all websites should be treated equally, whether they are large corporate
services or small personal blogs.”); see Lessig & McChesney, supra note 41 (“Without net
neutrality, the Internet would start to look like cable TV. A handful of massive companies
would control access and distribution of content, deciding what you get to see and how
much it costs.”).
46 Sasso, supra note 44 (noting that some of the major supporters of net neutrality include “Amazon, Dish Network, eBay, Facebook, Google, Netflix, Sony[,] and Twitter”).
47 Marguerite Reardon, Amazon, Facebook, and Google Back FCC on Net Neutrality,
CNET (Oct. 19, 2009), http://commcns.org/1btY5wG.
48 President Barack Obama, Statement on Today’s FCC Vote on Net Neutrality (Dec.
2014]
An Overlooked Basis of Jurisdiction for Net Neutrality
65
when Julius Genachowski resigned as FCC Chairman in 2013.49 Other supporters of net neutrality include consumer advocate and human rights groups, such
as Free Press.50
Opponents of net neutrality, including Verizon and the Cato Institute, claim
that the imposition of net neutrality regulations would degrade broadband services or freeze them at the status quo, because the regulations would discourage innovation.51 Many opponents, such as the large wireless service providers
and cable operators believe the marketplace is the correct venue in which to
allow the issue of net neutrality to be decided; not the regulatory arena.52 Some
opponents of net neutrality argue that net neutrality is a violation of the network providers’ property rights.53
Other opponents of net neutrality argue that prioritization of bandwidth is
21, 2010). More specifically, President Obama stated that:
Today’s decision will help preserve the free and open nature of the Internet while encouraging innovation, protecting consumer choice, and
defending free speech. Throughout this process, parties on all sides of
this issue – from consumer groups to technology companies to broadband providers – came together to make their voices heard. This decision is an important component of our overall strategy to advance
American innovation, economic growth, and job creation. As a candidate for President, I pledged to preserve the freedom and openness that
have allowed the Internet to become a transformative and powerful platform for speech and expression. That’s a pledge I’ll continue to keep as
President. As technology and the market continue to evolve at a rapid
pace, my Administration will remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse, and
that the democratic spirit of the Internet remains intact.
Id.
49 President Barack Obama, Statement by the President on Julius Genachowski (Mar.
22, 2013) (“Because of [Chairman Genachowski’s] leadership, we have expanded highspeed [I]nternet access, fueled growth in the mobile sector, and continued to protect the
open Internet as a platform for entrepreneurship and free speech”).
50 Major U.S. Consumer Groups Support FCC Action on Net Neutrality, FREE PRESS
(Oct. 21, 2009), http://commcns.org/1exFUR3. In his letter to FCC Chairman Julius
Genachowski, Craig Aaron, senior program director at Free Press states:
The fight for Net Neutrality is often mistakenly portrayed as a clash of corporate interests.
That’s simply not the case. Certain companies may oppose Net Neutrality or sow unfounded
fears about what the FCC is doing, but consumer groups and public advocates are united in
their support for an open Internet. The FCC should not be deterred by the phone and cable
industry’s attempts to muddy this debate with myths, misdirection and manufactured outrage. We need strong and clear Net Neutrality rules now to safeguard the Internet’s future.
Id.
51 Robert Pepper, Network Neutrality: Avoiding a Net Loss, TECHNEWSWORLD (Mar.
14, 2007), http://commcns.org/1jeqyG7.
52 Id.
53 Kelsey Zahourek, Net Neutrality Infringes on Private Property Rights, PROP. RTS.
ALLIANCE (Sept. 21, 2011), http://commcns.org/1gdPy07.
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necessary for future innovation on the Internet.54 These opponents argue that
BSPs should have the ability to provide preferential treatment in the form of
tiered services.55 For example, a network service provider, such as a wireless
service provider, could give data-transmission priority to those companies that
pay a premium, which will “give an advantage to the most important or most
profitable [Internet] traffic.”56 The opponents explain that the added revenue
received from such services could be used for the building of increased broadband access to more consumers.57 These advocates have also expressed that net
neutrality regulation would have adverse consequences for innovation and
competition in the market for broadband access by making it more difficult for
network providers to recover their expenditures in the broadband networks.58
IV.
THE FCC’S OPEN INTERNET ORDER
On December 21, 2010, the FCC adopted the Open Internet Order.59 In this
order, the FCC imposed three requirements on broadband service providers:
transparency; a prohibition on blocking websites and certain applications; and
no unreasonable discrimination. 60 The transparency rule required a network
provider to “publicly disclose accurate information regarding the network
management practices, performance, and commercial terms of its broadband
Internet access services sufficient for consumers to make informed choices
regarding use of such services and for content, application, service, and device
providers to develop, market, and maintain Internet offerings.” 61 Under the
“no-blocking” rule, the fixed broadband provider cannot “block lawful content,
applications, services, or non-harmful devices.”62 Also under the “no-blocking”
rule, the mobile broadband provider cannot “block lawful websites, or block
applications that compete with [the provider’s] voice or video telephony services.”63 Further, the network providers are subject to the doctrine of reasonable network management.64
See, e.g., JONATHAN D. HART, INTERNET LAW (2007).
Alan Davidson & Tom Tauke, A Joint Policy Proposal For an Open Internet,
GOOGLE PUBLIC POLICY BLOG (Aug. 9, 2010, 1:38 PM), http://commcns.org/1osIAIv.
56 Robert D. Atkinson & Philip J. Weiser, A Third Way on Network Neutrality, 47 NEW
ATLANTIS 47, 47 (2006).
57 Id.
58 FTC to Host Workshop on Broadband Connectivity Competition Policy, F.T.C. (Dec.
2007), available at http://commcns.org/1fls8Cm.
59 Open Internet Order, supra note 4, at 17,905-06.
60 Id. at 17,906.
61 Id. at 17,937.
62 Id. at 17,906.
63 Id.; see also 47 C.F.R. § 8.5(b) (2012).
64 Open Internet Order, supra note 4, at 17,928; see also 47 C.F.R. § 8.5(b).
54
55
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An Overlooked Basis of Jurisdiction for Net Neutrality
67
Finally, the FCC established the “No Unreasonable Discrimination” rule,
under which broadband providers “shall not unreasonably discriminate in
transmitting lawful network traffic” to their customers.65 The FCC found that
network practices are reasonable if they are “tailored to achieving a legitimate
network management purpose.”66 Legitimate network purposes include: “ensuring network security and integrity”; contending with “traffic that is unwanted by end users” (for example, parental controls); or “reducing or mitigating
the effects of congestion on the network.”67
The FCC issued these rules based on their jurisdiction over communications
by wire and radio.68 Further, the FCC stated that they were implementing these
rules based on the specific statutory mandates in the Communications Act as
amended by the Telecommunications Act of 1996, including provisions that
direct the Commission to enhance Internet investment and to protect and promote voice, video, and audio communications services.69 Specifically, the FCC
found that Section 706 of the Telecommunications Act of 1996 directs the
Commission (along with state commissions) to take actions that encourage the
deployment of “advanced telecommunications capability.” 70 “Advanced telecommunications capability,” as defined in the Act, includes broadband Internet
access.71 Under Section 706(a), the Commission is required to encourage the
deployment of such capability by “utilizing, in a manner consistent with the
public interest, convenience, and necessity,” various tools, including
“measures that promote competition in the local telecommunications market,
or other regulating methods that remove barriers to infrastructure investment.”72
Broadband service providers including Metro PCS and Verizon subsequently challenged this order in court.73 In their joint brief, appellants Metro PCS
and Verizon argued that the challenged order should be vacated because the
open Internet rules are unconstitutional under the First Amendment.74 Further,
the appellants argued that the FCC does not have authority to regulate mobile
Internet access under the Communications Act.75 The appellants also argued
47 C.F.R. § 8.7 (2012).
Open Internet Order, supra note 4, at 17,908.
67 Id. at 17,952.
68 47 U.S.C. § 152(a) (2006).
69 See Telecommunications Act of 1996, 47 U.S.C. § 1302(a) (2011).
70 Id.
71 Id. at § 1302(d)(1).
72 Id. at § 1302(a).
73 Joint Brief for Verizon & MetroPCS, at xii, Verizon v. Fed. Commc’ns Comm’n
(Docket No. 11-1355, Document No. 1381604) (D.C. Cir. July 2, 2012), available at
http://commcns.org/1bQU9Rs.
74 Id. at 3.
75 Id. at 14-15.
65
66
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that the Commission cannot impose license conditions because it lacks the
statutory authority in the first instance to regulate broadband services.76 In addition, the appellants argued that the Communications Act expressly forbids
the FCC from applying common-carrier regulation to broadband Internet access, so the rules are invalid.77 Finally, the appellants argued that the rules are
arbitrary and capricious.78
In light of the Net Neutrality decision, the addition of the BTA as a jurisdictional basis will ensure that the FCC can act, consistent with U.S. law, on imposing certain net neutrality restrictions.
V.
A TRUE BASIS OF JURISDICTION: THE WTO BASIC
AGREEMENT ON TRADE IN TELECOMMUNICATIONS
SERVICES
Despite all of the focus on net neutrality, advocates and opponents have both
overlooked a key jurisdictional basis that would enable the FCC to have clear
jurisdiction 79 over net neutrality. Perhaps even more importantly, the BATs
requires, the United States to implement certain net neutrality obligations.80
Since 1998, the United States and over 107 other countries agreed to the
BATS; 81 the most far-reaching trade agreement on telecommunications services to date.82 As part of this agreement, the United States had great foresight
to include within its commitments a broad range of new services and technologies.83 More specifically, the United States foresaw the coming growth in internet-based services and committed itself, as did several other countries, to
cover packet-switched services, among other critical telecommunications services.84 Packet switched services are in fact the equivalent of broadband services and the United States, during the negotiations, expressly included these
services to protect its growing IP-based services providers, such as MCI
Id. at 11-12.
Id. at 11.
78 Id. at 11-12.
79 WTO, Post-Uruguay Round Negotiations on Basic Telecommunications, available at
http://commcns.org/1exGb6H (last visited Jan. 21, 2014).
80 See WTO, Telecommunications Services: List of Commitments and Exemptions,
http://commcns.org/1hhO08l (last visited Jan. 21, 2014).
81 See id.
82 Edmund Andrews, 68 Nations Back Openings of Telephone Markets and the Unlocking of State Monopolies, N.Y. TIMES, Feb. 16, 1997, at 1, 14.
83 WTO, Services: Sector by Sector, Telecommunications Services (last visited Jan. 21,
2014), http://commcns.org/MQcMhY.
84 47 U.S.C. § 303(r); see generally Fourth Protocol to the General Agreement on Trade
in Services, supra note 16; see also Negotiating Group on Basic Telecommunications, supra
note 17.
76
77
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An Overlooked Basis of Jurisdiction for Net Neutrality
69
Communications.85
Because of this commitment by the United States, it is bound to implement
all of its commitments under the BATS for IP-based services.86 As part of this
trade agreement, each country is responsible for implementing its commitments.87 In the United States, treaties are the supreme law of the land.88 Further,
under Section 303(r) of the Communications Act, the FCC has the authority to
implement treaty commitments without further Congressional authority required.89 Accordingly, to the extent that the BATS requires net neutrality typeregulation, the United States is under an obligation to adopt and implement
such regulation.90 Because of Section 303(r) of the Communications Act, the
FCC may be that implementing body if it so chooses (no further statutory authority is required).91
However, Section 303(r) has been utilized consistently by the FCC as a basis for implementing treaties that the United States is a party too. For instance,
in implementing the United States commitments made in treaties negotiated
and agreed to under the international organization, the International Telecommunications Union, the FCC utilizes Section 303(r) of the Communications
Act as the basis of jurisdiction. 92 Similarly, the FCC has relied on Section
303(r) to implement its WTO commitments in the past and continues to utilize
85 See High Speed, IP Based Voice and Data, SWIFTBROADBAND (Sept. 2008),
http://commcns.org/1gC8wfq.
86 See WTO, The United States of America Schedule of Specific Commitments Supplement 2 (Apr. 11, 1997), http://commcns.org/1hhO08l.
87 See generally Services: Sector by Sector, Telecommunications Services, supra note
85.
88 U.S. Const. art. VI (“This Constitution, and the Laws of the United States which shall
be made in Pursuance thereof; and all Treaties made, or which shall be made, under the
Authority of the United States, shall be the supreme Law of the Land; and the Judges in
every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the
Contrary notwithstanding.”)
89 47 U.S.C. § 303(r); see generally Fourth Protocol to the General Agreement on Trade
in Services, supra note 16.
90 47 U.S.C. § 303(r); see generally Fourth Protocol to the General Agreement on Trade
in Services, supra note 16.
91 In re Applications of Ameritech Corp., Transferor, and SBC Communications, Inc.,
Transferee, For Consent to Transfer Control of Corporations Holding Commission Licenses
and Lines Pursuant to Sections 214 and 310(d) of the Communications Act and Parts 5, 22,
24, 25, 63,90, 95, and 101 of the Commission’s Rules CC Docket 98-141 (Oct. 6, 1999).
92 See generally In re Amendment of Parts 1, 2, 15, 25, 73, and 90 of the Commission’s
Rules to Make Non-Substantive Editorial Revisions to the Table of Frequency Allocations
and to Various Other Rules, Order, DA 10-762, 25 FCC (July 21, 2010),
http://commcns.org/LYZuPC; see also In re SES Americom, Inc. Petition for Declaratory
Ruling Regarding Direct Broadcast Satellite Service to the U.S. Market from the 105.5º
W.L. Orbital Location, IBFS File No. SAT-PDR-20070129-00024 Call Sign S2731, Order,
(Jan. 16, 2003), available at http://commcns.org/1b13tqL.
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the rules it adopted as part of this implementation.93 To date, there have been
no challenges to the FCC’s authority to implement treaties in its discretion.94 In
fact, many of its licensees, such as wireless service providers, rely on and have
commitments in their licenses or are required to comply with international law
requiring compliance with international treaties.95
In committing to the BATS, there were certain key principles, which mimic
those of net neutrality, which the United States committed to implement for
packet switched services. 96 Specifically, the Reference Paper to the BATS,
which the United States committed to implement, requires the adoption of
requirements on transparency, anti-competitive practices and fair interconnection.97
With regard to transparency, a significant portion of the BATS agreement,
including the reference paper, is based on transparency.98 The negotiators of
the BATS agreement recognized early on that transparency was critical in order to enable competition in the telecommunications marketplace.99
The agreement also requires the adoption of rules that prevent anticompetitive practices by telecommunications service providers.100 Specifically,
the BATS provides that: “Appropriate measures shall be maintained for the
purpose of preventing suppliers who, alone or together, are a major supplier
from engaging in or continuing anti-competitive practices.”101
The BATS goes further and specifically identifies anti-competitive safeguards that must be addressed. 102 These include: (a) engaging in anti93 See, e.g., In re International Settlements Policy Reform Joint Petition for Rulemaking
of AT&T Inc., Sprint Nextel Corporation and Verizon Modifying the Commission’s Process
to Avert Harm to U.S. Competition and U.S. Customers Caused by Anticompetitive Conduct, FCC IB Docket No. 11-80 RM-11322, IB Docket No. 05-254, IB Docket No. 09-10
(Nov. 29, 2012), 7250-51 (2011); see also Review of Foreign Ownership Policies for Common Carrier and Aeronautical RadioLicenses under Section 310(b)(4) of the Communications Act, as Amended, 26 FCC 11703 (2011).
94 Mike Ludwig, How Verizon’s Challenge to FCC Net Neutrality Rules Could Silence
Minority Voices, TRUTHOUT (Sept. 11, 2013, 12:58 PM), http://commcns.org/1gxpBIx.
95 In fact, satellite operators are required under Part 25 of the FCC’s rules to engage in
international coordination consistent with the ITU Convention and other treaties. See e.g., In
re EchoStar Satellite Operating Co., Application for Special Temporary Authority Related
to Moving the EchoStar 6 Satellite from the 77º W.L. Orbital Location to the 96.2º W.L.
Orbital Location, and to Operate at the 96.2º W.L. Orbital Location, Memorandum Opinion
and Order, File No. SAT-STA-20130220-00023, at ¶ 9 (July 9, 2013),
http://commcns.org/1btYLlT (discussing international coordination requirements under the
ITU treaty).
96 Negotiating Group on Basic Telecommunications, supra note 17.
97 Id.
98 Id.
99 Id.
100 Id.
101 Id.
102 Id.
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An Overlooked Basis of Jurisdiction for Net Neutrality
71
competitive cross-subsidization; (b) using information obtained from competitors with anti-competitive results; and (c) not making available to other services suppliers on a timely basis technical information about essential facilities
and commercially relevant information which are necessary for them to provide services.103
Accordingly, similar to some of the basic net neutrality principles, the
BATS requires the imposition of anti-competitive safeguard to prevent anticompetitive behavior in the telecommunications market.104 Based on this requirement, it is reasonable for the FCC to utilize this commitment to implement at least the no blocking and anti-discrimination provisions of the current
net neutrality requirements, among other future requirements.
The BATS requires fair and non-discriminatory interconnection among telecommunications suppliers.105 Specifically, the BATS requires that interconnection is available among telecommunications service networks in order to allow
the networks of different suppliers to interconnect.106 Further, the BATS requires that interconnection shall be at any technically feasible point and that
interconnection agreements be made public.107 This provision was agreed upon
in order to limit the ability of dominant or significant telecommunications
suppliers to require unreasonable interconnection points and to ensure that
there is transparency in the interconnection process.108
Further, the BATS requires that interconnection is provided under the following: Under non-discriminatory terms, conditions (including technical
standards and specifications) and rates and of a quality no less favorable than
that provided for its own like services or for like services of non-affiliated
service suppliers or for its subsidiaries or other affiliates; in a timely fashion,
on terms, conditions (including technical standards and specifications) and
cost-oriented rates that are transparent, reasonable, having regard to economic
feasibility, and sufficiently unbundled so that the supplier need not pay for
network components or facilities that it does not require for the service to be
provided; and upon request, at points in addition to the network termination
points offered to the majority of users, subject to charges that reflect the cost of
construction of necessary additional facilities.109
The BATS recognizes that interconnection is a complex process, so it provides for dispute settlement.110 Accordingly, a service supplier under the BATS
103
104
105
106
107
108
109
110
Id.
Id.
Id.
Id.
Id.
Id.
Id.
WTO: Agreement on Telecommunications Services (Fourth Protocol to the General
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requesting interconnection with a major supplier has recourse with an independent body at any time or after a publicly-known reasonable period of
time.111 The key principles underlying net neutrality include transparency, interconnection, and non-discrimination.112 The BATS covers all of these.113 In
fact, because it is a treaty, the BATS provides the FCC with authority to implement a significant subset of net neutrality principles as rules.114
Despite its commitment to the WTO reference paper for packet switched
services, the United States has not implemented these commitments for broadband services.115 In fact, there is no indication that the FCC has even considered this as a basis for jurisdiction.116 This may be in part because no United
States government body has examined whether these commitments have been
or should be implemented—the review process consists only of regular annual
reviews by the United States Trade Representative seeking input on and reviewing compliance with other countries’ trade agreement commitments. 117
This is despite express language in Section 303(r) of the Communications Act,
which permits the FCC to implement treaties.118 Accordingly, the FCC should
Agreement on Trade in Services (GATS)), 36 I.L.M. 354, 367-68 (1997) (Reference Paper)
(provisions related to interconnection, including negotiations, transparency, and dispute
resolution).
111 Id. (dispute resolution).
112 See Open Internet Order, supra note 16 (adopting three basic rules for preserving
Internet openness and net neutrality: transparency, no blocking, and non-discrimination).
113 WTO: Agreement on Telecommunications Services (Fourth Protocol to the General
Agreement on Trade in Services (GATS)), 36 I.L.M. 354, 367-69 (1997) (Reference Paper)
(definitions and principles).
114 See 47 U.S.C. 303(r) (authority to prescribe rules and regulations necessary to carry
out a treaty); Schedule of Specific Commitments by the United States (2nd Suppl.) at 23, WTO: Agreement on Telecommunications Services (Fourth Protocol to the General
Agreement on Trade in Services (GATS)), GATS/SC/90/Suppl.2 (Apr. 11, 1997) (undertaking obligations contained in reference paper); WTO: Agreement on Telecommunications
Services (Fourth Protocol to the General Agreement on Trade in Services (GATS)), 36
I.L.M. 354, 367-69 (1997) (Reference Paper) (definitions and principles).
115 Schedule of Specific Commitments by the United States (2nd Suppl.) at 2-3, WTO:
Agreement on Telecommunications Services (Fourth Protocol to the General Agreement on
Trade in Services (GATS)), GATS/SC/90/Suppl.2 (Apr. 11, 1997).
116 See Press Release, FCC, FCC Acts to Preserve Internet Freedom and Openness (Dec.
21, 2010), available at http://commcns.org/1bQUxzg (summarizing the FCC’s jurisdictional
bases for implementing Internet rules and regulations). See also KATHLEEN ANN RUANE,
CONG. RESEARCH SERV., R40234, THE FCC’S AUTHORITY TO REGULATE NET NEUTRALITY
AFTER COMCAST V. FCC 13-15, 19-22 (2013).
117 Part of the issue here may be that the FCC has not engaged in its own process of
annual or other regular review to ensure its rules comply with U.S. treaty commitments.
Because Section 303(r) of the Communications Act is discretionary, such a review process
is optional. See 47 U.S.C. 303(r).
118 Section 303(r) of the Communications Act permits the FCC to
Make such rules and regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carry out the provisions of this chapter, or any
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73
consider, after appropriate notice and comment, the use of the BATS in adopting further net neutrality regulations. It provides the United States with a solid
basis to exercise jurisdiction in this area.119 Furthermore, failure to implement
the commitments of the BATS for broadband services leaves the United States
at risk to WTO dispute settlement.120
VI.
CONCLUSION
Net neutrality continues to be a very controversial area. Both sides have focused significantly on whether the FCC has the appropriate jurisdiction to act
in this area.121 Over time, the jurisdictional basis that the FCC has utilized has
been uncertain and the recent Net Neutrality decision 122 has resulted in the
FCC’s jurisdiction being made uncertain. However, what is certain is that the
BATS and Section 303(r) of the Communications Act provide the FCC with a
clear jurisdictional basis for the implementation of net neutrality rules. In fact,
the United States’ failure to implement these requirements means it is in violation of its treaty requirements.
international radio or wire communications treaty or convention, or regulations annexed
thereto, including any treaty or convention insofar as it relates to the use of radio, to which
the United States is or may hereafter become a party.
47 U.S.C. 303(r).
119 See 47 U.S.C. 303(r); WTO: Agreement on Telecommunications Services (Fourth
Protocol to the General Agreement on Trade in Services (GATS)) (Reference Paper), 36
I.L.M. 354, 367-69 (1997) (definitions and principles); Schedule of Specific Commitments
by the United States (2nd Suppl.) at 2-3, WTO: Agreement on Telecommunications Services (Fourth Protocol to the General Agreement on Trade in Services (GATS)),
GATS/SC/90/Suppl.2 (Apr. 11, 1997).
120 Boutheina Guermazi, Exploring the Reference Paper on Regulatory Principles,
WTO, available at http://commcns.org/1btYUpi (last visited Sept. 26, 2013) (explaining
that once the reference paper is adopted, “the principles . . . become binding commitments
and enforceable through dispute settlement under WTO.”).
121 See RUANE, supra note 115.
122 See Net Neutrality Decision, supra note 13.